Million Dollar Case Study S05 : Episode 1 | The Story So Far… | Amazon Product Research Basics

(waves lapping) – As a lot of you know, this is the start, it's
number one of a series of a collaborative private
label product launch that we are gonna do, totally transparent. – [Lenny] It all began in 2015, when our CEO, Greg Mercer had the idea for the case study – All right let's do the thing, (chuckles) – At the time it was called the Collaborative Product Launch. – There was some educational resources about selling on Amazon at the time. However, none of them would actually share what products they were selling. So I was like, you know
what, why don't we just do a product launch in real time, really pull back the curtain so they can see the actual product, actually how we source it, they can follow along
with the entire journey and then ultimately see how
the product sells on Amazon? – So the first product chosen
was bamboo marshmallow sticks, which we called the Jungle Stix. Today, they're still our
best-selling product. Greg showed everything
live, from start to finish on how we found this product
and launched it on Amazon. – Ken may have been a little skeptical.

I think he may have
been a little skeptical cause he was like, you know,
we're launching this product in front of the entire world,
what if it doesn't go well? Doesn't that look really bad on us? And I was like, there's always
a chance of that happening. But like I said, I was quite confident in the Jungle Scout tool, as
well as just the methodologies and, that I've learned to launch products. – So many people were inspired and this really began a wave of entrepreneurship in E-commerce. Because of the success of the series, Greg wanted to launch another product, but he had a loftier goal this time. And this is when The Million
Dollar Case Study was born. The idea was to keep launching products until we reached a $1 million in sales and give all the profits
to charity along the way. This season saw the launch
of the baby hooded towels or Jungle Snugs, which
again was a huge success. We then began to think
about a third season and what it could potentially look like.

So that's when we had the idea to expand into international markets. Greg was joined by Kim and together they launched
the Jungle Slumbers, which was sleeping bags
in the UK, Amazon market. Now, at this point, we'd
hosted three seasons and launched three different products. We wanted to continue the case study because we hadn't reached
our goal of $1 million yet.

And we could see how the Amazon landscape was changing every single year. So we wanted to make
sure that our education was up to date. So we started thinking about season four. but we're wondering what
we could do differently. – This isn't called the
$750,000 case study, we're going to a million dollars and we need one more product to help us get there a little bit faster. – So we ended up taking
yet another approach to launching a product and that was to sell a
higher priced product with a significant improvement
or innovation to it. Rolando joined Greg this season and together they launched
the Jungle Sliders, keyboard slider trays into the U.S market.

(bright upbeat music) Education has always been
one of the main themes of the Million Dollar Case Study. We've not only helped
entrepreneurs get started on Amazon but also given back to
a variety of charities. The first charity that we chose
was Doctors Without Borders. Following that, we decided to
donate to Pencils of Promise, who build schools in
underserved communities. It was then in the summer of 2018, we officially completed
construction of a school in Ghana from the proceeds of the case study. So again, this season we're
gonna donate all the profits from our new product to charity, and we're gonna get your
help in deciding which one. So stay tuned for that. – I think The Million Dollar Case Study has at a bit of a turning point. One, because I think we're just about at the million dollars of revenue. That doesn't mean we have to stop, but it does mean that we
met the original goal. I don't know exactly the
best option for season five.

One thing that's for sure,
is we just want to structure and to build it in such a way that it's like the most
helpful piece of content on the internet for
building an Amazon business. – That brings us to season five, 2020. So by the end of this episode, you're gonna find out
exactly what criteria I'm gonna be using to
find our latest product. Let's get to it. Imagine a blueprint, a step-by-step guide, a case study, where we
peel back the curtains and show you what it
takes to sell on Amazon.

Welcome to the Million Dollar Case Study. (train trotting) What does it really
take to sell on Amazon? Thousands of people start on this journey but only a small few end
up following through. Why is that? All the information is out there. What's the difference between
someone that is successful and that isn't? That's the question I'm
gonna explore this season. While working at Jungle Scout and being an Amazon seller myself, we're always aiming to
stay ahead of the game and offer our audience extra
insights into the process. We've seen a lot of changes in the Amazon space over the years and how important it is
to keep ahead of them. So with this series, you're
gonna see over my shoulder as I launch a new product on Amazon, we're also gonna get
into the nitty gritty, showing you the thinking behind each step in a way that we've never done before.

I'm gonna have guests along the way to share their perspectives and we're gonna sit down
and have Amazon real talk. Discussing the pretty and
the not so pretty side of selling on Amazon. First up, tell me how did
you get started on Amazon? What's the story? – Sure, so my journey
started back in 2014. I was in university at that time too. My goal was to get a government job and to get a good salary, hopefully and I had no idea that people
were making money online or had online businesses. – Yeah, so I am a recovering
physical therapist. I used to have my own
company and it was great. It was my first experience with business but it wasn't for me. And then Amazon came around 2015, 2016 and that's where I fell
in love with E-commerce. – So I got started selling on Amazon in a very probably different way. I started the Seller Diaries
Series on our Instagram, where I kind of just blogged my process of becoming an Amazon seller, the ups and downs of everything.

– I was starting a
business with some partners and that business ended up failing. It was a tech startup, but
to make a long story short, I was searching for an opportunity and I actually had pulled my back. And so I was bedridden
and I was just like, I remember I did a Google search, businesses that you could do online and different opportunities came up. But the one that stood out to me the most was selling on Amazon.

– You know, I was working a crappy job that I wasn't happy with and I was looking for ways
to make some money online so I was doing some Google searches. And I believe I came across
an article on selling on eBay and then eventually I figured out that you've been selling
on Amazon as well. – I was working for a retailer and I kind of had a monotonous job. So I would download podcasts
all the time and listen to them while I worked and I was
listening to a podcast that was talking about
a couple in California who were buying and reselling a discontinued flavor of
Crystal Light on Amazon.

And they made, I wanna
say it was like 30 grand or something and it peaked my interest. – Back in the day, I used
to make all of my revenue from my own E-commerce store. And then one day my buddy, Lars, he was just hounding me
to try selling on Amazon. He was like, just list a
couple of products on Amazon. Just list a couple of products. Because I, for the longest time, my philosophy was, I wanna own my website, I wanna own my email list
and that sort of thing but I took his advice and I
just listed a couple of items on and instantly they shot
up and started making, I think I made like $10,000 or something with just a handful of
products, doing nothing. And after that I was hooked. – This is what I love about this business.

People from all different walks of life, find it in all different sorts of ways. But regardless of how
you find the opportunity, it all starts with product research. Now, most people find this
the most challenging part of the entire process. So I'm gonna make sure
to spend a lot of time on this topic, to ensure that
you're successful as possible. So let me start with the
characteristics of a good product so that you know exactly what to look for. First up, are what we call must haves. These are the most important criteria and the first one is,
existing solid demand, which means a load of people
are already buying the product. High number of existing
sales on a regular basis. You don't wanna put in all this effort and then no one buys your product. Low competition. Now, while you want high demand, you also want low competition. This means that not
too many other listings with hundreds or thousands of reviews. This would make it much harder for you to jump in and make good sales. Next up is good margins. You need to make sure you
have a healthy profit margin.

This is the most important
part of this business. You need a healthy profit
because your whole goal here is to make money of course and the amount of effort is the same, regardless of whether
you have a low profit or a high profit. So you wanna make sure that
there's a good profit margin. A rough rule of thumb,
is the rule of thirds. Aim to source a product for about a third of the selling price Amazon's fees will likely
take up another third and finally, this leaves
a third for you as profit.

We'll explore this in more detail but this is an easy way to think about it. No legal issues. This means not selling products that have a patent or trademark. If you do, your listing
could get taken down, your account could get suspended and you could even face legal action. Ability to improve. This means setting your product
apart from the competition, through improving the product or bundling it with a
complimentary product. A good way to find improvements is to look at the one
star and two star reviews on existing listings and seeing what people don't
like about that product. A good way to find a
product to bundle with is to visit the Frequently bought section on an Amazon listing. These tend to be great
items to bundle together. This can help you make more
sales, charge a higher price, and even hold off the competition. And don't worry, I'm gonna
go into much more detail as we go through the process. Next stop on nice to haves.

While not as important as the must haves, they'll, of course, nice to have. The first one is small and lightweight. These items are cheaper in shipping, the Amazon fees are less
and are just easier overall. Easy to source and ship, this means, not an item
that you've invented and have to produce from scratch. It already exists and
there's existing suppliers for this product. Low seasonality. This means the product sells
consistently all year round. You can sell seasonal
products if you're experienced but they do tend to be a little trickier to launch and to sell. Simple and durable. This means it doesn't
have a lot of moving parts and it's not easily breakable.

For example, think of electronics and wine glasses versus a spatula. One is very simple, the
others have a lot more chance of breaking or going wrong. Weird and interesting. As a general rule, the most
popular products out there, tend to be super competitive. And it's often the lesser known products that you wouldn't think of that tend to do very well on Amazon. You'll see some examples of these as I go through some product research. How did you go from physical therapy to discovering and selling on Amazon? – I had a coach who was telling me that I was spinning my
wheels in physical therapy because I had a lot of
energy towards the business but there were so many moving parts.

There was insurance. You had to deal with all sorts of things. So he said, "I see you in
importing and exporting." And I had no idea, money,
what he was talking about. That very next day, I saw an advertisement for eBay of all thing. It was this really amazing video of like him, like taking
his children to Disney World and living this lifestyle
and all this kind of stuff. I'm like, you know what? This is better than what I'm
currently doing right now. Let me give it a shot. – And so, I discovered the
opportunity of selling on Amazon through my boyfriend, Stephen, because he also had an online business and we discovered a program that teaches people step-by-step.

So I started to take the program and I decided to launch my first product. – And I knew when I started Jungle Scout, I didn't even know honestly that, how Amazon works or like how
these third-party sellers were selling products and
people were making money behind the scenes kind of thing. And then when I learned
about it, I was like, I could do this. And I was like, kinda
worked with Jungle Scout for like a year then I
was like, you know what? I really think I can do it.

And I kinda jumped in
and learned the ropes and shared it with
everybody too, (laughs). – Ironically enough,
it was a YouTube video of Greg going through the process of launching their very first Million Dollar Case Study product, which was the bamboo sticks. And lo and behold, I just follow along, there was already a few
episodes that had already, had passed but I caught up fairly quickly and just kinda stayed on it and learned everything from
the Million Dollar Case Study, applied it and launched
my very first product. – I kinda always knew that
I would run a business with my brother someday. We're both very entrepreneurial and I just felt like that would happen. And so I asked him if he
wanted to do it with me, he said, yes, and we started
doing retail arbitrage because that's the business
model I learned about. We used retail arbitrage
to kind of get experience and build capital for the investment in our private label business. And then we transferred over and have been doing it ever since about almost five years now. – I figured out that you
can do retail arbitrage so that's what I jumped into.

You know, I was selling some used books and, you know, some things from Walmart and Target and things like that. And that was doing okay. And I wanted to figure
out a way that will, so I don't have to like, go
into retail stores all the time and look for profitable products. And I think that's when I
discovered Jungle Scout actually, four or five years ago and tried to go the private label route now I'm also doing some private label as well as some wholesale today. – Drop shipping was a flop but that led into retail
arbitrage, online arbitrage and then eventually I decided
to go into my own business and started selling litter products because I have a cat and that sort of was an easy
product to test on my cat.

And one thing led to
another and here I am today. – It wasn't an easy journey,
it took me many years before I started making
significant income on Amazon. It didn't happen overnight,
but it was a learning process and it's totally worth it. I'm so grateful for the business today and it's such an amazing opportunity for people to create a new income stream, especially to create income online. – So you've heard these
terms like, private label, wholesaling, arbitrage,
but what do they all mean? Well, these are the different ways that you can sell on Amazon. Let me break them down. It essentially comes down to where you purchase your products from and then how they're fulfilled. So the first one, private label. This is where you purchase
straight from the factory. You're gonna create your
own brand and product and sell that on a brand
new listing that you create. The second way, wholesaling is where you purchase
direct from a wholesaler of an existing product and you then sell their product on Amazon. This can be a cheaper and
quicker way to get started than private label, however, you'll usually competing with lots of other sellers
trying to sell that same product and therefore the profit
margins are generally lower.

The other challenge with wholesaling is that a lot of the
more popular products, these companies are already
selling their product directly on Amazon themselves. So it's hard to compete
with them on pricing. The third option here is retail arbitrage, where you purchase from
somewhere like Walmart or other places, where they
have goods on clearance. You look for items that are
selling full price on Amazon, purchase it on clearance and then you make a
profit on that difference. So a lot of people use this as a way to learn the ropes of Amazon and start making a bit of money quickly without much investment at all. The problem is that, it's not
a very scalable business model as you still have to
go out there every day looking for new products to sell and ultimately you're
still exchanging your time for dollars, as opposed
to building a system that will generate money for you.

So my favorite method and what I'm gonna be doing
throughout this case study is the private label model. I believe that this is the best way to build a long-term scalable business, where you're ultimately creating an asset that you could later on sell. Now, a lot of people will often ask, well, which category should I sell in? Or what types of products should I sell? So now I also wanna give
you some additional things to think about, as you're
choosing your product, such as kind of the things that
we don't recommend you sell. I'm not here to give
you hard and fast rules about not selling these types of items but I did want to bring to
light some of the challenges that might arise with
selling some of these.

So I don't recommend selling
highly competitive products. This isn't to say that it's impossible to compete in a competitive market but usually it takes a lot more
money and a lot more effort. However, if you do have the money and the skills to compete with
these competitive products, then you don't necessarily have
to completely rule them out. But for beginners, however, this is definitely not
something that I'd recommend.

I also don't recommend
selling seasonal products. Think of Halloween products
or Christmas trees, that sort of thing. It is really tricky to rank seasonally as your ranking suffers
a lot throughout the year when you're not selling that product. Then when you wanna relaunch, let's say for the Christmas season, you're gonna need to implement a lot of advanced strategies
to get yourself ranked in order to compete with
the other seasonal products.

So again, for beginners, this isn't something that
I'd recommend you sell. I'd recommend you sell products that sell consistently year round. I also don't recommend
selling food, drinks, supplements, topicals, basically anything that goes in or on your body. These are very competitive niches and then they also come
with more liability. You know, you'd hate it if
someone were to get sick and then come back and try to sue you for one of these types of products. Next, when it comes to media, I don't recommend selling
things such as books or music because you usually have
to create those yourself.

So unless you wanna write
a book or sing a song, this probably isn't the category for you. Clothing, shoes or handbags, are also a very competitive category and most people have brand
loyalty to these types of items. It's also more expensive to
start off with these items, as you need to purchase inventory for a variety of sizes and colors. So this category usually has a much higher
initial investment. Complicated or complex
items such as electronics, computers, appliances, watches, et cetera, tend to be more complicated
to sell as well.

You wouldn't want an entire
shipment of electronics to arrive at the Amazon warehouse and then the product doesn't work. We usually recommend leaving these types of more complicated items
with a lot of moving parts to more experienced sellers. I'd also recommend thinking
about any potential liabilities that could come with a product. For example, if you're
gonna sell a baby car seat, there's potentially a lot of liability with a product like that. Usually we'd recommend staying
away from items like this as there's again, a lot of
potential for lawsuits and so on if something malfunctions. Just think about what is
the worst possible thing that could happen with
this particular item? If it's something that you
feel someone could sue you for, then I'd probably steer clear of it. Now, does anyone remember fidget spinners? They came onto the market super
fast and were all the rage.

Then no one wanted them anymore and lots of sellers were
stuck with loads of inventory. I'd usually recommend staying
away from fad type items as they come and go quickly. Right now, lot's of the
people might be trying to sell coronavirus related items but they aren't guaranteed
to sell long-term as we don't know how long
this virus will last. That's why we say to stick to items that have more long-term potential.

Now a lot of people ask us
if they can sell a product that has a Disney character or their favorite football team on it. The answer to that is you can, only if you have permission
and a licensing deal to do so. So if you don't have that in place, I'd recommend staying away from anything that needs to be licensed. This also extends to
products that have a patent or a trademark, like I
talked about earlier. Now, new sellers always ask, how can I narrow down
my product idea list? So here are some questions
that you can ask yourself about your potential product. If a product fits the majority of the guidelines that I mentioned, then it probably has
great selling potential. The first question is, can I read the reviews about this product and make improvements? Can I bundle my product
with something else? Will this product give
a decent profit margin after taking into consideration FBA fees, cost of goods, shipping and PPC? Is this product selling for a
reasonable price on Alibaba? Are factories that I've contacted, willing to make adjustments for me? Does Google trends show an upward trend or at least a steady
trend for this product? Does the sales history
for the top 10 sellers, show steady sales over time? Now you don't have to check
off every single one of these, but the idea is that these questions give you some more things to think about, which could increase the
potential of your product.

Don't worry if you don't
understand one of those questions, I'm gonna go through how to
check all of these things as the case study goes on. Now, a recurring theme
throughout everything that I've talked about today is that there's no one size fits all. I've given you guys a whole
list of considerations and rules of thumb, but I do think it's important to emphasize that in reality, you're not
gonna check every single box.

So I wanna make sure that
you do your product research, tick as many of these boxes as you can weighing up the pros and
cons of your top products and then ultimately make
a decision and go for it. I definitely encourage you
to be as thorough as possible in the research stage
but I also don't want you to get stuck in analysis paralysis. The items that I've mentioned today should increase your chances of success but it doesn't necessarily guarantee it and part of entrepreneurship is just taking that leap of faith. You can only prepare so much, but your best teacher will
be jumping in and doing it. Getting that firsthand
experience of launching a product so that every product after that, will get even better and better.

All right, so that's the
criteria that I'm gonna be using to find our winning
product for this season. Now it's your turn. If you've been thinking
about selling on Amazon, today is the day to start. Don't wait, listen to what I'm sharing but remember that knowledge
isn't power unless it's applied. So take what you've learned here and get started on your
own product research, beginning with that initial
list of product ideas. Now, if you wanna follow
along with the case study, then check the description
below this video for more resources. We have a private Facebook group for anyone that wants to take the Million Dollar Case
Study challenge as well and follow along with me. And it's all totally free. Now, if you've gotten some
value from this episode, please give me a big thumbs up below, make sure you're subscribed
as well and hit that bell icon So you get notified when
new episodes go live.

In the next episode of the
Million Dollar Case Study, my friend Carrie comes to town. Find out how I roke her into doing product research with me find out which category
we start searching in for the next case study product and it may just break one of the rules I've shared with you today. But you have to tune in to find out. I'll see you then. (soft upbeat music) All right, we're doing a sound test. (claps) (beep) How's that?.

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